For the first time, investors holding index funds are gaining indirect ownership of SpaceX, as the rocket and satellite company went public on June 12, marking the largest initial public offering (IPO) in history. Just weeks after its debut, SpaceX is making its way into various funds that are part of millions of 401(k)s and brokerage accounts.
On June 30, SpaceX was added to the Russell 1000, thanks to a new rule that allows the largest recent listings to be fast-tracked into the index. Following this, it is expected to join the Nasdaq-100 by July 7 through a similar expedited process. Consequently, millions of people who may not have directly invested in SpaceX will acquire a small stake through the funds they currently hold.
Interestingly, SpaceX’s stock price has cooled since its initial rush. As of now, shares are trading around $153, a decline from a post-IPO peak of approximately $226 reached just a few days after its public offering.
The influx of new capital comes from a rule that mandates that when a company joins an index, all funds that track that index must purchase the stock, regardless of the share price. This automatic buying leads to significant financial movements; the Russell 1000 addition alone is expected to generate over $4 billion in buying activity, and the Nasdaq-100 inclusion could add roughly the same amount. Along with other funds tied to similar benchmarks, the overall figure could be considerably higher.
This unprecedented buying also reflects a change in policy from index providers. FTSE Russell, which manages the Russell indexes, has altered its guidelines to allow major new stocks entry after just five trading days instead of waiting for a standard reconstitution. The Nasdaq has implemented its rapid-entry pathway this year, facilitating big new listings within 15 trading days.
However, it’s important to note that this buying activity does not represent an endorsement of SpaceX as a sound investment. Index funds do not conduct detailed analyses of stocks; they follow the rules, which does not take into account factors like growth potential, profitability, or overall valuation.
Conversely, the S&P 500, which is the benchmark for many retirement funds, is sitting this one out, as it has maintained strict profitability requirements, preventing SpaceX from qualifying. According to S&P Global’s S&P Dow Jones Indices, a company must demonstrate four consecutive quarters of positive earnings under generally accepted accounting principles (GAAP). SpaceX has not met this criterion, posting a loss of approximately $4.9 billion in 2025, followed by another loss in the first quarter of 2026.
Currently, SpaceX’s revenue is largely driven by its Starlink satellite-internet service, which generated about $11.4 billion in 2025, accounting for around 61% of the company’s total revenue and reflecting a growth of nearly 50% year-over-year. In contrast, the launch service has seen slower growth, contributing about $7.3 billion with an 8% increase. Overall, SpaceX’s revenue reached approximately $18.7 billion in 2025, but significant expenses related to its Starship rocket initiatives and the acquisition of Elon Musk’s AI venture, xAI, have led to overall financial losses.
With a market capitalization near $2 trillion, SpaceX is trading at an exorbitant valuation—over 100 times its annual revenue—making it difficult to assess through traditional metrics like the price-to-earnings ratio since it has not turned a profit yet.
While investors who hold shares in funds tracking the Russell 1000 or the Nasdaq-100 will inadvertently become SpaceX shareholders, it’s critical to understand that inclusion in an index does not equate to investment quality. The real assessment of whether SpaceX warrants more than a minimal stake hinges on Starlink’s growth trajectory and the company’s ability to achieve profitability, far beyond the indices it has recently joined.
